GeoMarketing 101: What Are Beacons?

Use cases for Bluetooth devices like Beacons are expanding — and in the realm of retargeting, not just proximity marketing.

By Lauryn ChamberlainMar 15, 2016 1:01PM

Location data, geo-targeting, geofilters. Location-based technology is opening up a world of possibilities for marketers — but it’s also complicated, as new capabilities and use cases seem to emerge every day.

With the goal of breaking down some of the most important “geo” concepts to provide a better understanding of the basics — and a jumping off point for exploring how far the power of location may take us — we introduce the next installment of our GeoMarketing 101 series: understanding beacons.

What Are Beacons?

A beacon is a device that communicates with a shopper’s smartphone in a bid to improve their in-store experience. Beacons allow mobile apps on both iOS and Android to “listen” for beacon signals in the physical world and then react accordingly.

Essentially, this means that beacon technology provides an understanding of a device’s location on a very micro level — it can be specific down to a single store aisle, for example — and then the beacon can communicate with a mobile app to deliver relevant content to users based on their location. The technology that allows for this exchange is Bluetooth Low Energy (BLE).

Practical Applications Of Beacons

Beacons are primarily used to message relevant deals or content to shoppers while they’re in a store, to collect shopper data for future use, or both.

To provide a basic example, a retailer could deliver an offer for 30 percent off all jeans to a shopper browsing in the denim department. Many marketers have begun to move beyond this use case of simply pushing deals, but it does provide an added incentive for an already-interested shopper to make an in-store purchase.

Beacons can also be used to enhance the shopping experience in a way that transcends sales and coupons. If a hardware store shopper is looking at a drill, beacons could be used to deliver relevant content pertaining to that item: product reviews for the drill, for example, or directions for finding an accompanying tool item. Essentially, beacons have great potential as a way to try to preemptively deliver the kind of price and feature information that users often search for on their smartphones while their in-store. Offering it up immediately and seamlessly is likely to spur sales.

How Are Brands Using Beacons?

Macy’s rolled out beacons through a partnership with Shopkick back in 2014, at first largely using the Bluetooth devices to push content related to sales and promotions when shoppers visited particular store departments.

The department store chain has since reported positive feedback and growing numbers opted-in consumers, but even a year-plus out, it’s still exploring the potential of beacons as an online/offline shopping tool.

“Beacons are very important right now, though I don’t think we’ve maximized its capability at this point,” Macy’s Terry Lundgren told GeoMarketing in January. “Customers have to opt-in to use it and they can demonstrate clear interest. Nevertheless, it’s still in the very early stages.”

With the newly launched platform, users who open the Barneys New York app see two prompts: The first is to permit push notifications, and the second is to allow Barneys to use customers’ location to determine if they’re in or near a Barneys store.

Once users say yes, Barneys can push out editorial content from in-house publication The Window, which includes interviews with designers, seasonal lookbooks, and more. For in-store customers, content is more targeted and personal: The app might send notifications or recommendations based on what’s in stock that is also in users’ digital shopping bags or wish lists. Barneys goal in using beacons this way is to move beyond flash sales or messages into attempting to predict what a user might be shopping for and what product information could complement their purchase.

“The most important touchpoint is the phone,” Matthew Woolsey, Barneys VP of digital, told Digiday. “We’re proud of the way we’ve used our customer data online and offline to be fluidly connected — it allows for a personalized, consistent experience in store and online.”

On the data collection side, GeoMarketing‘s David Kaplan speculated earlier this month that beacons are poised to make the jump from a hot proximity platform to a hot retargeting platform in 2016.

This evolution has been the basis of proximity marketing platform Unacast’s business model since its inception over a year ago. Now, the idea of “proximity-influenced” retargeting is likely to receive a closer look from major advertisers as part of a recent deal between the Norwegian/New York tech company San Mateo, CA-based mobile ad company Opera Mediaworks.

“The real value of beacon data is in its accuracy and granularity. Until now, that has simply meant targeting a shopper in the moment, as they walk down the aisle about a nearby product on sale,” Andrew Dubatowka, director of Product Strategy for Opera Mediaworks, told GeoMarketing. “With this partnership, marketers can extend the life of that beacon data beyond the confines of the store and, with a detailed understanding of a shopper’s interests, apply it in other contexts, such as audience targeting and even ROAS (return on ad spend) measurement.”